FIRS to Sell Tax Evaders’ Properties, Freeze 6,772 Accounts

…generates N3.5tn from taxes in eight months

The Executive Chairman, Federal Inland Revenue Service, Mr Tunde Fowler, said on Thursday that the government would sell properties built and developed in corporate names across the country on which taxes were not being paid.

Fowler disclosed this in Lagos at a stakeholders’ meeting, where he noted that the country still had one of the lowest tax revenue to Gross Domestic Product ratios in the world.

He said the FIRS generated a total of N3.5tn from taxes between January and August this year, more than N1tn higher than the revenue for the same period of 2017.

He stated, “On paper, it looks good but the main issue I want to point out here is that the majority of taxpayers that accounted for this revenue have not changed; the laws have not changed; and to a great extent, the consultants to the companies equally have not changed.

“Even at current prices, the oil revenue cannot fund our nation. The only way is for us to have a high level of tax compliance and focus on the non-oil sector. A major component of the non-oil happens to be Value Added Tax, and we have found out that a number of businesses collect VAT and do not remit to the government.”

Fowler stated that the FIRS carried out an exercise about a year ago regarding properties, adding, “We started at home in the Federal Capital Territory, and we established over 2,000 properties and land that were built or developed in corporate names and limited liability companies. The value of these properties is in excess of N2tn, and they (the owners) have never paid any taxes for them. We have contacted them and sent them our assessments. A number of them are paying.

“But for those that have owners that are not paying, we will go to court to get the approval or court order to sell those properties. We are not only doing that in Abuja. We have concluded in Lagos; we are currently going to Osun, Oyo, Kaduna; and eventually, we will cover the whole federation.”

Fowler said the FIRS looked at all businesses, partnerships and company accounts with a minimum turnover of N1bn per annum for the past three years.

He added, “First of all, the law states clearly that before you open a company account, part of the opening documentation is the tax ID. From the 23 banks we have analysed so far, we have 31,395 records; out of which effectively minus duplication, we have 18,602.

“We broke those into three categories: those that have Taxpayer Identification Numbers; those that have no TIN, and of course, no TIN, no pay; and those that have TINs and are not even paying anything.”

According to him, the total number of TINs and no pay, and no TIN and no pay is 6,772.

The FIRS boss noted, “So far, we have sent out 2,980 letters, and we believe that before the end of September, we will get most of them out. What we have done is what we call substitution, which also is in our law. It empowers us to appoint the banks as the collection agents.

“So, the total of TIN and no pay, and no TIN and no pay of 6,772 will have their accounts frozen or put under substitution pending when they come forward. First of all, they refused to come forward in 2016; they refused to come forward under the VAIDS, and so we are putting them on notice that it is their civic responsibility to pay taxes and to file all audit accounts.

“At this point, let me also apologise; I have signed about five letters of apology. We found out that in some cases, when a company opened an account, they did not put a TIN, so their name came up here. So, I will call on the compliance officers in the banks, please follow the law.”

Fowler stated that it was discovered that the majority of major organisations that were allowed to do self-assessment did not truthfully declare or pay the correct taxes that were due.